Project Labor
Agreement Workshop
Terrance Davis
Assistant City Manager
Discussion Agenda
• What are Project Labor
Agreements (PLAs)?
• Legal basis for PLAs and typical
negotiation
• Typical provisions
• Review typical Advantages and
Disadvantages of PLAs
• Local Contractors consideration
• PLA Policy Options
• Introduce Napa-Solano Building
and Construction Trades Council
for additional discussion
What is a PLA?
• Project Labor Agreement (PLA):
– Pre-hire contracts between project-
owner and local construction unions
– Used for larger, more complex
projects
– By their terms do the following:
• Require worker representation by
labor unions
• Set basic terms and conditions of
employment
– Primary purpose: ensuring that only
unionized labor is used
• Community Workforce Elements
(CWA)
– Part of a PLA to include targeted
hiring goals
Legal Basis for PLAs
• California Public Contract Code
section 2500, et seq., governs a
public entity’s use of PLAs
– PLA must include at minimum:
• Prohibition on
discrimination
• Permission for all qualified
contractors and
subcontractors to bid
(whether they are union or
non-union)
• Guarantees against work
stoppages, strikes, lockouts
Related Provisions
• Vallejo Local Hiring Preference
– Section 3.20.230
• Provides 5% bidding bonus
for Vallejo businesses
• California Prevailing Wage Law
– Labor Code requires contractors
to pay specific wage rates on
public works projects
– The rates are published by the
State’s Department of Industrial
Relations (“DIR”) on County
basis
Benefits of PLA
• Make large projects easier to
manage by placing unions under
one contract
• May include Community
Workforce provisions to require
participation in apprenticeship,
and training programs for
women, minorities, veterans, and
other underrepresented groups
• May mean a larger percentage of
construction wages stay in the
City/Region
Disadvantages of PLA
• Potential for increased Project
costs if union wages are higher
than typical project labor costs
• In California, cities are already
covered by prevailing wage laws
• Evidence does not show that PLA
construction projects are safer
• Local hiring objectives can be
achieved without a PLA
PLA Policy Options
• Project valuation threshold
• Escalation/inflation factors
• Coverage: Citywide or Project
Specific
– Would not typically apply to
private development
• Sunset/Revisit date
• Exclusions
– i.e. emergencies, grant funded
• Community development
components
– i.e. local hire goals (20-30% are
common)
Regional PLA Examples
• Cities
– City/County of San Francisco
– City of Concord
– City of Elk Grove
– City of Martinez
– City of Santa Rosa
• Education
– Vallejo Unified School District
– Solano Community College
District
– Fairfield-Suisun School District
Local Contractor
Consideration
• Local workforce participation is
moderate in Vallejo
• Region has many smaller “mom
and pop” businesses that often
can’t mobilize workforce for
larger Public Works projects but
could be subcontractors
PROJECT PROJECT BUDGET CONTRACTOR
CONTRACTOR
LOCATION CONTRACT AWARD
Sacramento Street Bridge Repl. $13.5M Gordon Bll, Inc. Alamo, CA $8.3M Sacramento Street Road Diet $1.4M Bay Cities, Inc. Concord, CA $721k Water Dept. Paving Repair n/a Team Ghilotti Petaluma, CA $920k per year Hiddenbrooke Pkwy Landscape Rehab $2.4M McGuire & Hester Alameda, CA $2M Safe Routes to School - Seven Schools $3.9M
Vanguard
Construction Livermore, CA $3M
Florida Carolina Pavement $1.4M Team Ghilotti Petaluma, CA $1.4M Next Steps
• Receive additional presentation
from Napa-Solano Building and
Construction Trades Council
• Provide policy direction to staff
on whether to pursue the
possible adoption of a Project
Labor Agreement requirement
for City projects above a certain
construction dollar amount
Contact/Questions
Terrance Davis
[email protected]
BUILDING BETTER
COMMUNITIES
Project Labor Agreements
Good for communities. Good for taxpayers. Good for business.
PROJECT
LABOR
AGREEMENTS
are a type of workforce contract
used in the public and private
sectors.
HOW THEY WORK
03 PLAs ensure that workers are trained,
skilled, and qualified.
PLAs set goals for hiring local workers.
PLAs can set targets for securing local
business participation.
PLAs create career opportunities for entry-
level workers.
HOW THEY WORK
04 BENEFITS
Project Labor Agreements promote:
CERTAINTY
TRANSPARENCY
ACCOUNTABILITY
05 CERTAINTY
PLAs establish the rules, procedures, and project-
specific standards upfront.
TRANSPARENCY
PLAs ensure that projects are meeting goals and
managed efficiently.
ACCOUNTABILITY
PLAs hold all parties accountable for meeting
agreed upon standards, goals, and project
management practices.
BENEFITS
06 BENEFITS
HELMETS
TO HARD
HATS (H2H)
Project Labor Agreements
create opportunities for
veterans by connecting
highly skilled men and
women from the Armed
Forces to promising
construction careers.
Since 2007, there has been
confirmed placement of
over 6,000 Veterans, many
of whom have disabled
status.
08 GOOD FOR COMMUNITIES
KEEPS LOCAL TAX DOLLARS IN THE COMMUNITY
By creating jobs for local workers and investing in career-development.
Money generated form wages has an Economic Development Multiplier of 2.5 and disposable income changes hands on average 12 times.
EXPANDS OPPORTUNITIES FOR LOCAL WORKERS AND
BUSINESSES
By increasing access to family-supporting jobs and career training
ESTABLISHES A CAREER PATH FOR LOCAL WORKERS
By providing on-the-job training, allowing local workers to pursue a family-supporting career
09 GOOD FOR TAXPAYERS
DELIVERS PROJECTS ON TIME AND ON BUDGET
By setting clear expectations and standards upfront. This means construction bids are more accurate and projects are kept on schedule.
BUILT USING THE LOWEST RESPONSIBLE BIDDER
ENSURES QUALITY AND REDUCES OVERALL COSTS
By requiring that all workers are properly trained and highly skilled. Projects are built well the first time, with fewer costly change orders.
BUILT USING A STREAMLINED, HIGHLY SKILLED WORKFORCE
AVOIDS COSTLY DELAYS
By enabling better workforce coordination. Projects are managed efficiently and completed on time.
BUILT ONCE, BUILT RIGHT
10 GOOD FOR BUSINESS
REQUIRES FAIR AND OPEN COMPETITION
Projects are awarded through a fair, open, and competitive process for union and non-union contractors alike.
Public Contract Code Section 2500 – as a result of SB922 (2011) - codifies minimum requirements for basic PLA language text and codifies the permissibility of the use of and entrance into such agreements:
“…permits all qualified contractors and subcontractors to bid for and be awarded work on the project without regard to whether they are otherwise parties to collective bargaining agreements.”
PROVIDES EASY ACCESS TO SKILLED & TRAINED WORKERS
By creating a pool of well-trained, highly-qualified workers, giving all contractors flexible access to a diverse labor pool.
MANAGES COMPLEX PROJECTS EFFICIENTLY
As a labor management tool, Project Labor Agreements have received widespread praise in the private and public sectors.
Used in private and public work since the 1930’s, the number of agreements in CA in K-12 and CCD construction has increased IN EXCESS OF 500%+ since 2008 11 15
Construction industry apprenticeships enroll more studentsthan any single college or university undergraduate program in California.
“Joint” Apprenticeship programs are administered by trade unions and funded by a specified per-hour contribution from participating employers
Joint apprenticeship programs train 92%of California’s apprentices.
Two-thirds of California apprentices in Joint Programs are people of color.
Joint apprenticeships train 97% of female construction apprentices Joint apprenticeship invests hundreds of millions of dollars per yearin training, while also spending more on training per student than those run by “employer-only/merit shops”.
Because of increased wages and lack of student debt, a construction apprenticeship can be a better option for many young people than a more traditional undergraduate program.
Graduates of joint apprenticeship programs earn more moneyimmediately upon completion than graduates of “employer-only/merit shop” programs.
BUILDING BETTER
COMMUNITIES
Project Labor Agreements
Good for communities. Good for taxpayers. Good for business.